A direct cost is a cost than can be attributed directly to a product; examples include materials used in production, electricity used by a machine making the product, worker hours spend operating the machine to make the product.
An indirect cost is a cost than occurs but cannot be attributed directly to a product; examples include electricity used by lighting, the account staff wages, business rates.
indirect costs, like direct costs can be both fixed and variable: business rates are fixed (for a year) but the cost of electricity used to light the factory floor is going to be variable depending upon how much the machines are used and staff being present - there can also be more than one product being made on the factory floor on different machines, but only one set of lights over the whole floor - one light could easily cover 2, 3 or more machines.
Direct: "I can explain this", said JJ. Indirect: JJ said that he can explain this.
Prime cost = direct materials + direct laborwhile conversion cost = direct labor + factory overhead( which includes indirect materials, indirect labor and other indirect costs
direct cost has direct relation with product manufacturing while indirect cost not and not identifiable with cost as well.
The Answer is NO. Direct costs are direct cost which can be clearly/economicaly identified with the cost object, indirect costs cannot be traced to a specific cost object, based on the definition direct cos cant be an indirect cost (Misdhaaque Ahmed)
yes cost function measures the direct costs along with indirect cost.
what are the differences between direct cost and indirect cost in financial accounting
No direct costs and indirect costs are not same and opposite of each other.
Direct cost are those costs which varies directly with variation in volume of products units like direct labor or direct material while indirect cost has not direct connection with volume of units of products like depreciation building rent supervisors salary etc.
direct cost is that cost which is separately identifiable and allocatable to production volume like direct material or direct labor while all other cost which is not separately identifiable is indirect cost like overheads.
direct characterization "tells", where as indirect characterization "shows".
Define direct and indirect labour?"
An apple cost $1.00the direct cost is .875c and the indirect cost is .125c tax.direct cost = cost of the item by itself.indirect cost = cost to purchase or attain an item.If you want the apple, you have to purchase the apple with tax.Direct cost is that cost which directly related to the production of units like direct material or direct labor while indirect cost which is not directly related to the production of units like salary of factory manager etc.
Hereunder several example of the employ of "direct" as an adjective: direct consequence, direct descendant, direct action, direct discourse or speech (British), direct evidence, direct cost. You can also use it to mean: frank, open, sincere; a direct answer, a direct way of doing things. "Direct" as an adverb: I shall write to you direct, the train goes direct to Boston . Several examples of the employ of "indirect" as an adjective: an indirect route, to make an indirect reference, to answer a question in an indirect way, indirect cost, indirect object, indirect discourse or speech (British).
is direct cost a? Selling cost, manufacturing costs, direct, manufacturing cost indirect, general and administrative cost, fixed cost , variable cost, is direct cost a? Selling cost, manufacturing costs, direct, manufacturing cost indirect, general and administrative cost, fixed cost , variable cost,
conversion cost = direct wages + factory overheads (indirect material + indirect wages)
direct costing is a technique in which costs are classified as direct cost or indirect cost.
They are direct costs.
No, because varible cost can be direct or indirect cost. Direct cost can always be traced directly to a cost object, but not indirect cost. For example, sales commission.
How can the direct and indirect cost principles applicable to labour?
A direct cost must be traceable directly to the product. Indirect cost can't be traced to a specific product such as electricity.
Research and development cost is indirect cost as this cost is not directly required to manufacturing the production units and thatâ€™s why always an indirect cost.
Indirect light would be larger than direct light, because indirect light is from an angle, and it is usually dimmer.
If you are selling hamburgers, the meat is a direct cost. If the meat was used at a company picnic, it is an indirect cost.
Direct cost is that cost which is directly attributable to units of product like raw material and labor while indirect cost is not directly attributable like factory maintenance cost.
prime costs only includes direct cost like direct material and direct labor.